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**CDSL:** CMP: 1536 : LONG TERM GROWTH:25% CY GROWTH: 72% | Q1_fy25 Result update
(BO Accounts with CDSL is about to reach the benchmark 13 Cr from mere 3 Cr during fy_21)
#### **About Company:**
Central Depository Services (India) Ltd. (CDSL), the first listed Indian central securities depository, was founded in 1999. The main function of CDSL facilitates holding and transacting in securities in the electronic form and facilitates settlement of trades on stock exchanges. These securities include equities, debentures, bonds, Exchange traded Funds (ETFs), units of mutual funds, units of Alternate Investment Funds (AIFs), Certificates of deposit (CDs), commercial papers (CPs), Government Securities (GSecs), etc. First depository to cross the milestone 10 Crore demat accounts till Q3_fy24. The Depository holds assets worth INR 64 lakh cr as on Q4_fy, 2024 and over 23060 Issuers are associated with CDSL.
They have 3 Subsidiaries:
1) CVL: CVL is the ¬first KYC Registration Agency (KRA) registered with SEBI. CVL is also registered as GST (Goods and Service Tax) Suvidha Provider (GSP) with GSTN. CVL provides RTA services to corporates, Aadhaar based eKYC services and Aadhaar based eSign services.
2) CIRL: CIRL is in the business of enabling policy holders to hold life policies, motor policies, health policies and all other types of general (non-life) policies in electronic form.
3) CCRL: CCRL facilitates holding and transfer of commodity assets in electronic form through issuance of electronic Negotiable Warehouse Receipts (eNWRs).
#### **Industry Overview and Future Outlook:**
- The Indian depository market is witnessing strong growth driven by increasing retail participation in equity markets, government initiatives like **Atmanirbhar Bharat**, and financial inclusion campaigns. The push towards digital services, such as e-KYC, e-AGM, and margin pledging, will continue to benefit CDSL in the coming quarters.
- The financial markets are expected to remain robust, supported by improving macroeconomic conditions. The focus on digital innovations and broader investor participation, especially from Tier 2 and Tier 3 cities, is expected to sustain CDSL's BO account growth and revenue increase.
#### **Peer Group Comparison:**
- **NSDL** is a primary competitor. For comparison, CDSL's growth in BO accounts (20%) outpaced NSDL's growth, positioning CDSL as a more aggressive player in terms of demat account growth.
- CDSL's **consolidated revenue** and **profit growth** were significantly higher, making it a leading entity in the depository services market.
#### **History:**
CDSL was able to grow their sales from mere 21Cr & Profits of 2 Cr during the year 2002 i.e 20 years back while today they are able to generate 800 Cr sales and 400 Cr Profits respectively. This shows strong growth of 40X. They just came up with the IPO during FY_18 with a turnover of 150Cr and we can see the growth during the past 4 years. Demat accounts have tripled during the past 3 Years. We have even recommended this company during the IPO for strong growth as well as consistent dividends. Today the price is around 12X in just 7 years.
### Analysis of CDSL Q1 FY25 Financial Results
#### 1. **BO Account Growth:**
- In Q1 FY25, the total number of Beneficiary Owner (BO) accounts reached **125.5 million**, a growth from **115.6 million** in Q4 FY24. In comparison to Q1 FY24, where the number stood at **104.7 million**, this represents a significant year-over-year (YoY) growth of approximately **20%**.
#### 2. **Consolidated Sales and Profit Growth:**
- **Sales Growth:**
- In Q1 FY25, **revenue from operations** reached ₹**25,738.82 lakh**, compared to ₹**24,078.22 lakh** in Q4 FY24 and ₹**14,968.14 lakh** in Q1 FY24. This reflects a **YoY growth of 71.98%** and a **QoQ growth of 6.9%**.
- **Profit Growth:**
- **Net profit** for Q1 FY25 stood at ₹**13,416.72 lakh**, up from ₹**7,368.58 lakh** in Q1 FY24, marking an impressive **YoY growth of 82.08%**. The profit also rose slightly from ₹**12,941.56 lakh** in Q4 FY24.
#### 3. **Profit Margins:**
- **Net Profit Margin:**
- The **net profit margin** in Q1 FY25 was **46.67%**, a slight increase from **46.03%** in Q4 FY24 and a considerable rise from **42.39%** in Q1 FY24.
- **EBITDA Margin:**
- **EBITDA** in Q1 FY25 amounted to ₹**14,400 lakh**, growing from ₹**13,300 lakh** in Q4 FY24 and ₹**9,000 lakh** in Q1 FY24, reflecting strong operational efficiency.
In summary, CDSL delivered strong Q1 FY25 results with impressive YoY growth in revenue, profit, and BO account growth. With favorable industry trends and continued expansion in digital services, CDSL is well-positioned for sustained growth in the near future. We may see this year sales crossing the benchmark 1000 Cr and Profits at 500 Cr. New buying again can be done during any fall near 970 while some 5% profits can be booked at 1651. 3 Year target of 2260 can be kept.
### Future Outlook
- **Growth Prospects**: Positive outlook with expected continued growth in depository services and new business ventures in the fintech space. We may see CDSL reach 5000 Cr sales & 2500 Cr Profits till fy_2032. This can give multiyear rally along with high and consistent dividend earnings.
### Conclusion
CDSL has shown robust financial growth in FY24, with substantial increases in revenue, net profit, and EPS. The company maintains a strong financial position with healthy liquidity and profitability ratios, supported by strategic investments and effective expense management. The future outlook remains positive with continued focus on expanding services and enhancing shareholder value.
52% of the total holdings stay with institutions like BSE, LIC, Bank, MF and Insurance companies.
